After Harvard, the University of California, Berkeley, is facing action from the US authorities for failing to meet foreign funding disclosures.
US Department of Education has initiated a ‘Notice of Investigation and Records Request’ into the University of California, Berkeley, after a review of the university’s foreign funding disclosures to the Department may be incomplete or inaccurate.
The Berkeley investigation follows the Department’s earlier announcement of a Section 117 investigation of Harvard University.
Section 117 requires that postsecondary institutions receiving federal financial assistance must disclose foreign source gifts and contracts with a value of $250,000 or more annually to the Department.
In May 2023, credible news media reports indicated that Berkeley had failed to disclose to the Department hundreds of millions of dollars in funding from a foreign government.
After reviewing those reports and Berkeley’s Section 117 disclosure submissions, on June 6, 2023, the Department sent a letter to Berkeley requesting that it address these allegations.
In its responses (dated June 16, 2023, and July 7, 2023), Berkeley acknowledged having failed to report millions of dollars in foreign government funding, as required by Section 117, and detailed its multiyear effort to cultivate a close relationship with and secure financial commitments from foreign government-controlled entities.
Berkeley’s responses revealed a fundamental misunderstanding regarding its Section 117 reporting obligations.
U.S. Department of Education Secretary Linda McMahon has directed the Office of General Counsel (OGC) to re-assume the Department’s enforcement functions relating to the disclosures of foreign gifts and contracts under Section 117 of the Higher Education Act of 1965.
Under the Biden Administration, enforcement responsibilities were shifted from OGC to the Office of Federal Student Aid (FSA), which is otherwise tasked with administering federal student aid programs. By returning foreign funding disclosure oversight duties to OGC, the Trump Administration has made clear its prioritization of Section 117 enforcement.
President Trump recently signed an Executive Order to bolster transparency requirements regarding foreign funds flowing to American higher education and research institutions. The Executive Order directs the Secretary of Education to reverse or rescind any actions by the prior Administration that allow universities to obscure details regarding their foreign funding. Further, it also requires universities to disclose the true source and purpose of foreign funds.